ISLAMABAD, Nov 16: The World Bank has advised Pakistan to start working on import of 4,000MW of cheap electricity from Central Asian states, besides working on domestic sources to overcome electricity shortage owing to a 43 per cent expected increase in demand to 20,000MW by 2010.
The World Bank estimates that Pakistan’s peak demand now exceeds 14,000MW and the present installed capacity of 19,500MW has become inadequate on account of the wide variations in the water availability, which greatly reduces the firm capacity available.
“Electricity demand at the generation level is forecast to grow at 7-8 per cent per year to about 20,000MW by fiscal year 2010 and 44,700MW by 2020,” a government official told Dawn quoting fresh World Bank estimates.
The country that had a comfortable supply position during the last several years has already started experiencing shortages during peak periods and “ it is anticipated that if no new capacity is added, firm power shortage would amount to 5,500MW by fiscal year 2010.”
The World Bank understanding that besides improving supply efficiency, demand management, addition of new hydro and thermal power stations, Pakistan should expedite importing 1,000MW from Tajikistan and Kyrgyz Republic in the first phase and then increase such imports to 4,000MW in the second phase.
These imports, the World Bank believes, have two major advantages. First, the cost of supply from Sangtuda, Rogun, Talimardjan and Kambarata power stations in the CARs would range between 2.26 cents to 3.75 cents per unit compared with existing average generation cost in Pakistan at 5.6 cents per unit.
Pakistan is now entering into contracts with independent power producers (IPPS) for thermal power generation at a tariff as high as 14 cents per unit.
Second, the attractive feature of the imports form CARs is that Pakistan’s peak demand occurs in summer, when the Central Asian power systems have large surpluses from their hydroelectric generation stations.
The WB says that international financial institutions like Asian Development Bank, Islamic Development Bank and USAID and private sector companies like AES Corporation of USA and RAO UES of Russia have already indicated to be part of the project once feasibility studies currently underway are completed.
According to the government of Pakistan estimates, the country is most likely to face a major energy crisis in natural gas, power and oil in the next three to four years that could choke the economic growth for many years to come.
Pakistan’s total energy requirement would increase by about 48 per cent to 80 million tons of oil equivalent (MTOE) in 2010 from about 54 MTOE currently, but major initiatives of meeting this gap are far from turning into reality. Major shortfall is expected in the natural gas supplies, the sources said.
According to official energy demand forecast the demand for natural gas, having about 50 per cent share in the country’s energy consumption, would increase by 44 per cent to 39 MTOE from 27 MTOE currently.
Partly contributed by gas shortfalls, the power shortage is expected to be little over 5,250MW by 2010, a little lower than World Bank’s estimates of 5,500MW. Simultaneously, oil demand would also increase by over 23 per cent to about 21 million tons in 2010 from the current demand of 16.8 million tons.
This would leave a total deficit of about nine million tons of diesel and furnace oil imports, sources said.
Since the gas shortfalls were expected to be much higher, the country would need to enhance its dependence on imported oil, thus increasing pressure on foreign exchange situation, more so as international market continues to go up.
Planning Commission sources said the government had planned to add an overall power generation capacity of about 7,880MW by 2010. Of this, about 4,860MW is to be based on natural gas, accounting for 61 per cent of capacity expansion.
However, the gas-based power expansion of about 4,860MW would remain in doubt since these estimates were based on gas import options for completion in 2010, 2015 and 2020. None of these projects could achieve these deadlines.
According to World Bank estimates, the indigenous gas supply would fall from 32.6 MTOE in 2010 to 20.7 MTOE in 2025 while the gas supply-demand gap would rapidly increase as demand is expected to grow continuously, quadrupling in 2025.
